Software Quality is critical to exit value

Normally financial debt has its direct impact on a company’s exit value. With technical debt however, the impact is less visible.

According to McKinsey, CTOs estimate that technical debt amounts to 20-40% of the value of their entire technology estate before depreciation. When you don’t have it under control this prevents you from creating new customer value and therefore has a direct negative impact on your business value. Like McKinsey’s research stated, better scoring on technical debt correlates with higher revenue growth. (source)

Technical debt is like dark matter: you know it exists, you can infer its impact but you can’t see or measure it. This results in product delays, hidden risks, spiralling costs and even engineers leaving your company in frustration. Leaving technical debt as a big surprise could have a negative impact on your future exit value or may hinder certain actions like adding new acquisitions to an existing one.

Focusing on an optimal exit, technical debt should be on the agenda, but is often neglected.